Latin America increases military spending

Latin America saw the world's largest increase in military spending during 2010 [GALLO/GETTY]

Latin America has displaced traditional high-rollers, including the Middle East and Europe, as the region registering the largest percentage increase in military spending last year, according to a new study released by the Stockholm International Peace Research Institute (SIPRI).

The increase in real terms was 5.8 per cent for Latin America compared with 5.2 per cent for Africa, 2.8 for North America, 2.5 for the Middle East and 1.4 per cent for Asia.

In Europe, the only region to register a fall, military spending in 2010 declined by 2.8 per cent in real terms compared with 2009.

The high spenders in Latin America include Brazil, Chile, Colombia and Peru.

Asked why a region with hardly any ongoing conflicts accounted for such a high per centage increase, Carina Solmirano, a researcher at SIPRI's Military Expenditure and Arms Production Programme said: "I would say the rise in military spending in countries like Brazil and Chile is mostly associated with aspirations for a stronger regional and international presence, but without necessarily being a reflection of competing military power."

Biggest spenders

Still, in sheer numbers, Latin America spent only about $63.3bn on its military last year compared with $721bn by North America, $382bn dollars by Europe, $317bn dollars by Asia, $111bn by the Middle East and $30bn by Africa, according to the SIPRI report.

The study also says part of the explanation for this rise in Latin America is to be found in the strong economic growth the region has experienced in recent years, while in other regions the effects of the global economic recession caused military spending to fall or at least rise more slowly in 2010.

Solmirano said the Latin American region does not face any major military threat and the reasons for these increases need to be found elsewhere. For example, she pointed out that Brazil has been actively seeking a larger role in international politics and longs for a permanent seat on the UN Security Council.

It is also a regional economic power and in some ways, the leader in the region, Solmirano said.

In Chile, on the other hand, the military has benefited from increasing revenues from copper exports, which explains why the country has been able to acquire such sophisticated armaments in the last years.

"As we say in the report, if the copper law is eliminated, it's very likely we will start witnessing a slowdown in arms imports," Solmirano said.

According to the 'Secret Copper Law', which has now been abolished, about 10 per cent of copper revenues were diverted specifically for arms purchases.

The law is being replaced by a new system to fund arms purchases, likely to be administered by the Ministry of Finance.

Goals and threats

Chile, unlike Brazil, is not necessarily aspiring to become a major world power, but it certainly seeks to have an important regional role – both diplomatic and economic – in the affairs of South America, she added.

While geopolitics is primarily behind Brazil's rising military expenditures, internal security threats have prompted Colombia and Peru to bolster their defence spending.

The increases in military spending are not only for arms purchases but also for the sustenance of the armed forces.

A notable feature of military expenditures in Latin America is that they tend to be dominated by personnel expenditures, which typically comprise 50-70 per cent of the budget, according to the report.

Argentina, for example, increased its military spending by 6.6 per cent in 2010, largely due to increases in salaries.

Solmirano said that Venezuela, for the second consecutive year, has witnessed a reduction of its military spending in real terms and the fall is associated with the country's negative economic growth. While almost all the economies in South America grew during 2010, Venezuela's contracted.

However, it is too soon to tell if the fall in military expenditure is going to continue in the future, she added. "Depending on how Venezuela's economy performs in the next years, we may witness new increases. But again, it's very hard to predict."

As for Argentina, the country's increase in military spending has been applied to personnel costs, while the share for arms acquisitions has been very low, Solmirano said.

In fact, Argentina's military equipment is so outdated that some experts have suggested the need to increase the share for arms acquisitions before all the equipment becomes obsolete.

The Argentine Ministry of Defence indicated last year that there will be increases in the upcoming years to modernise the armed forces.

Transparency

Meanwhile, in light of the increasing trend in military spending across Latin America, there have been renewed calls in 2010 to improve transparency in military expenditure and arms acquisitions.

The Organisation of American States (OAS) and Union of South American Nations (UNASUR) made commitments to strengthen existing transparency mechanisms, such as the Inter-American Convention on Transparency in Arms Acquisitions – and for member states to regularly report their military spending and arms acquisitions to the UN's annual Arms Register.

The study also points out that some neighbouring countries in South America have also made bilateral agreements to harmonise the reporting of their military expenditure – such as Ecuador and Peru, and Peru and Chile – as a way to build confidence and create more transparency.

Dr Samuel Perlo-Freeman, senior researcher and head of SIPRI's Military Expenditure Project, said that generally speaking, the majority of military spending is for recurrent expenses, that is personnel (salaries and benefits etc.), and ongoing operational costs (peacetime costs, e.g. training, upkeep, maintenance etc. as well as actual military operations).

However, the share that is devoted to spending on equipment and capital spending – including procurement, research and development (R&D) and military construction – varies enormously.

In major industrialised countries with significant arms industries, it is often around 30 per cent, or a little more in some cases, while in some less developed countries with very limited resources for major arms purchases, it may be as little as five to 10 per cent, he said.

A version of this article first appeared on the Inter Press Service news agency.